Healthcare is rapidly changing in the U.S., ushering great opportunities for innovative approaches to achieve the Institute for Health Improvement’s Triple Aim: improvement of health, improvement in the patient experience, and decreasing cost of care. Reimbursement models are shifting away from fee-for-service and toward pay-for-performance. This transformation puts hospitals in a lose-lose situation because they will no longer be incentivized to drive traffic through their doors. If hospitals continue to try to fill their beds, they are at risk for financial penalties for preventable readmissions. If they try to improve outcomes, they are at risk of driving down the quantity of customers available to treat. So hospitals are in great need for revenue generators that also improve patient outcomes.
Social entrepreneurship offers a unique opportunity to discover social value while using approaches that emphasize rapid and inexpensive discovery of commercial value. This may be a perfect time for hospitals to invest in creating startup incubators to accelerate the discovery of both socially and commercially valuable products and services that can improve health and healthcare as well as generate royalties for the hospital. There are still many unknowns to starting and successfully operating hospital-based incubators. The next post will explore some of the risks faced by hospital-based startup incubators.